[trebb]

"Fair"? It is a double taxation fraud, pure and simple. Say, you have 2 otherwise identical people, one with X (say, $100K - the number does not matter) in a 401k, and another with the same $100K, but in a Roth or in a regular savings account. Both start withdrawing and spending their money under "fair tax" system. The former would be paying consumption tax, but that would be instead of the previously deferred income tax he has not paid to get his 401k. The double taxation issue concerns the latter: he will be hit with the consumption tax on top of the income taxes he has already paid to put that same 100K into his Roth or in the saving account. Thus, unless there are specific compensatory provisions, like up-indexing of all after-tax accounts, it is a double taxation fraud.

So, what really irks you is that those with traditional IRAs might "get away with something" while those with ROTH IRAs would have already paid taxes on what they donated. While that may be a grievance, it is hardly a huge problem or cause to call the Fair Tax a "double taxation fraud". Using your reasoning, we should scrap all possibly good things if they don't first level the playing field to ensure some folks don't benefit because of existing conditions, no matter how much good the new ideas might effect. Sounds real similar to the Dims always wanting to lay more and more taxes on the "rich" because they have more than the poor. How dare someone have more and/or benefit more, even in the short run....

[GSlob]

Roths are like nothing in comparison with the total pool of already taxed money - besides Roths it includes savings AND the capital cost basis of every taxable investment in the country. And the double taxation fraud would apply to all of these, not merely to Roths. So it's a bit more than a "grievance".